Have a good idea. Think about starting a business of your own. Build your business. Develop an excellent product or service. Hire employees. Grow up. This is the perfect roadmap that every entrepreneur dreams for his life.
But we know that in the midst of all these steps there are a number of factors that need to be taken care of to get to the last point. One of the most important is corporate financial control.
According to the report Global Financial Stability, made by the International Monetary Fund (IMF), the level of indebtedness of Brazilian companies is among the highest in emerging countries.
Given this scenario, the benefits of this control become even more essential. After all, it is he who will give an overview of your company, pointing out problems and indicating the best decisions to be made to reach the solutions.
In this article, Sir Anthony Absolute will show all the benefits of business financial control, as well as important concepts and information for your business to go further and further.
What is corporate financial control?
Any company that wants to survive the first few months of life or wants to stay active for many years, needs to control their finances very well.
It is no news to anyone that the expectation is always to make a profit. Therefore, it is extremely necessary to know precisely all the factors that, when added, will reach this result.
Corporate financial control is the tool that will show you where you can invest your money, what expenses or revenues are frequent, and where exactly every cent is generated by your business. With it, you have a complete look at some important information such as:
- Operational costs
- Wages and benefits of employees
- Products that make a profit
- Damaging Products
- Budget planning
- Bills to pay
- Bills to receive
Benefits of Corporate Financial Control
Making important decisions is never an easy thing. When it comes to companies, mainly. If you go the wrong way, the result can be catastrophic.
How about having a partner at those times? Corporate financial control helps in your choices and brings more security to your day to day.
1. Tranquility in management
The first and great benefit sometimes is not even noticed. By performing a good financial control business, you keep your business running, with your bills up and well targeted investments.
All this allows you to have the peace of mind needed to make the best decisions to run your business. Nobody likes to take important steps with the rope around their necks, does not it?
2. Cutting expenses
You make a list every time you go to the grocery store, right? If you’re spending too much, you’ll need to review your purchases. With corporate financial control, so too.
You can put all your spending on paper, identifying the superfluous, the unnecessary, and the need to be revised to realize that it can be crucial for the bill to hit at the end of the month.
3. Forecasting for the future
We’re not talking about crystal ball! The corporate financial control allows setting short, medium and long term goals, defining a budget for each of these periods.
Thus, it is possible to design new investments for tomorrow, growing in a structured and planned way, through actions such as the opening of channels of action or the diversification of its lines of products or services.
4. ROI Planning and Tracking
ROI, or Return on Investments, is the ratio of the money you have earned or lost on an investment. With corporate financial control, it is possible to evaluate the ROI of a particular investment in advance to determine whether or not it is worth doing.
After making the investment, you can also track your performance if the return is as expected, correcting routes if necessary.
5. Recruitment or dismissal of staff
What are the costs to increase your team? And what are they otherwise? Hiring and firing is part of every day business. But with corporate financial control, it is possible to carry out these actions in a more structured way.
With it, you can gauge whether your cash flow allows you to afford a new employee – taking into account all costs like INSS and FGTS – plus the impact on your pocket of a contractor’s termination.
6. Definition of the selling price
Mapping your competitors and investigating how each acts in your market are the basic actions to set the selling price of your product or service.
But there are other factors, such as the Contribution Margin Projection and the Point of Balance Projection, that good corporate financial control will help you to do. They are important information to make the calculations necessary for your projections.
7. Collaborative budgeting
A good corporate financial control helps in the accomplishment of an action done by several institutions and that brings excellent results: the collaborative budget.
Basically, the collaborative budget allows each sector of the company to mount its budget proposal, justifying the need for the values, negotiating with the board its approval.
Thus, everyone comes to understand the impact of their actions on the end result of the business.
Many companies divide a percentage of what is saved as a way to motivate teams and encourage people to carry out their activities with a common goal and in a more conscious way.
Enterprise financial control allows you to understand the feasibility of the budgets presented, as well as the return that the sectors of your business have given from what is invested in them.
Want to go deeper into the subject? Sir Anthony Absolute explains in this article what you need to know to do your business financial control.
If you also want to have a good management of your personal financial life, here we explain why you should use a manager for this.
Corporate financial control is a broad and detailed subject. So if you have any questions, let’s talk! Leave in the comments just below.